August 24th, 2020 at 2:49 pm
Multiple Choice Question: What were the sellers required to disclose to the buyers? Pick the best answer:
A. Their actual knowledge of a sober living facility next door.
B. Their actual knowledge that the people next door constantly smoke cigarettes next to the property line.
C. Both A and B.
D. Any material fact that affects the value or desirability of the property.
Answer: Answer A is wrong (so Answer C is wrong too). California law strongly favors sober living facilities and other residential care facilities, given that studies show that a home-like setting is beneficial to recovering alcoholics and addicts, as well as people who are disabled, elderly, or otherwise in need of care. Most residential care facilities have 6 or fewer residents, which the law considers to be “residential use” of property. Hence, sellers and agents are not required to disclose the existence of such facilities to prospective buyers.
Answer B is the correct answer. If the sellers knew that the neighbors were constantly smoking, they should have disclosed that fact to the buyers. After all, question II.C.11 of the TDS specifically asks the sellers if they are aware of any “neighborhood noise or other nuisances.” Although the law favors residential care facilities, a seller should still disclose any known neighborhood issues, such as smoking, noise, lack of street parking, litter, vandalism, crime, or other problems.
Answer D is wrong. A seller is not required to disclose “any material fact” affecting the property, only any known material fact. It’s possible that the sellers did not know about the constant smoking, e.g. if they ran the AC all day long, if they had no true sense of smell (like my husband!), or if they were bedridden or something along these lines.
Determining whether any particular operation falls within the law for residential care facilities can be difficult at times because of the legal complexities involved. For more information, C.A.R. has a legal Q&A called Disclosure Issues Related to Residential Care Facilities (password-protected for C.A.R. members only).
-Thank you to Kathy King (Calabasas and Encino Manager) for suggesting this week’s legal tip.
Like what you see here? Sign up for more! Our free e-newsletter informs you of listings in your community, insider real estate tips, the latest in home trends, and more.
